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Debt Ceiling Watch 2013

Oct 2, 2013

In order to avoid bumping up against the statutory debt ceiling, the Department of the Treasury has begun undertaking a number of so-called "extraordinary measures". The current debt limit is $16.394 trillion.

The Treasury Department is using its final extraordinary measure, a debt swap with the Federal Financing Bank and and the Civil Service Retirement and Disability Fund. Treasury still estimates extraordinary measures will be exhausted by October 17, when it will only have $30 billion left on hand. On a related note, a Treasury official said that a short-term shutdown would not affect this date. Read more here and here.

A letter from Secretary Lew to Congressional members now estimates that extraordinary measures will be exhausted by October 17. At that time, Treasury estimates the federal government only to have $30 billion of cash on hand, which is well short of net expenditures on certain days. Read more here.

Secretary Lew sent a letter to Congressional leaders urging them to address the statutory debt limit before extraordinary measures are exhausted in mid-October. At that point, Lew expects the federal government only to have $50 billion of cash on hand, which will be unable to cover net expenditures for a significant period of time.Read more here.

The Treasury Department will enter into a "debt issuance suspension period" from 5/20/2013 through 8/2/2013. The Treasury Department will suspend additional investments to the Civil Service Retirement and Disability Fund (CSRDF). Additionally, the Treasury will suspend and redeem investments to the Postal Service Retiree Health Benefits Fund (PSFHBF).

Measures like this have been used in 1996, 2002, 2003, 2004, 2006, 2011, and 2012. Read more here.

The issuance of new debt was temporarily exempted from the debt ceiling due to legislation passed by Congress. That exemption expires May 19, with the debt ceiling automatically raised to incorporate all new debt issued since February 2. The Treasury Department has announced it will again begin to take "extraordinary measures" to create additional headroom, and also announced that it will receive a $60 billion payment from Fannie Mae on June 28. The Treasury Department estimates that these measures will not be exhausted before Labor Day. Read more here.

Today, President Obama signed the bill originally proposed by House Republicans which temporarily exempts all debt issued from now until May 19th from the Debt Ceiling. By signing this bill, the debt ceiling is expected to be hit next in August because of extraordinary measures. The bill also requires that both Houses of Congress pass a budget resolution by April 16th or their pay will be withheld until they do, or the Congressional term ends in 2014. Read more here.

House Republicans unveiled a temporary debt ceiling fix which would extend Treasury's borrowing authority through May 19th. This measure would exempt debt issued between the date of passage and May 19th from the debt ceiling, but would not raise the actual dollar amount of the debt ceiling. Tied to this measure would be a provision which would temporarily withhold pay from members if no budget is passed. Read more here.

Secretary Geithner has sent a letter to Speaker of the House John Boehner detailing the risks of a debt ceiling breach as well as calling on Congress to raise the debt ceiling as soon as possible due to the uncertainty of revenues during tax-filing season. In the letter, Geithner says that Treasury currently has enough borrowing authority, through the use of extraordinary measures, to last between mid-February and early March. Read more here.

The Treasury Department will enter into a "debt issuance suspension period" from 12/31/2012 through 2/28/2013. The Treasury Department will suspend additional investments to the Civil Service Retirement and Disability Fund (CSRDF). Additionally, the Treasury will suspend and redeem investments to the Postal Service Retiree Health Benefits Fund (PSFHBF).

Measures like this have been used in 1996, 2002, 2003, 2004, 2006 and 2011. Read more here.

In a letter to Congress, Secretary Geithner informed its members that the current debt ceiling of $16.394 trillion will be reached on December 31st, 2012 and that the Treasury Department would "begin taking certain extraordinary measures" afterwards. Using these measures will create about $200 billion in headroom, but because of the fiscal cliff, it is not known for how long these would last. Under normal circumstances, this would allow for about two additional months of time. Read more here.